Rising living costs have taken a sharp toll on UK households this year, with a wave of price hikes leaving many residents struggling to meet everyday expenses. The cumulative impact of higher council tax, energy tariffs and broadband charges has resulted in significant financial pressure, particularly for lower-income families.
The combined effect of these increases has added an average of £1,254 to essential annual bills, according to comparison site Uswitch. The situation has become so difficult that millions now find themselves unable to afford basic needs such as heating, rent or food, raising concerns among consumer groups and social welfare organisations.
Council Tax, Energy and Broadband among Biggest Contributors
The 2025 cost-of-living landscape was shaped by a series of changes in April, termed “Awful April”, when multiple household expenses rose almost simultaneously. According to Uswitch, most areas across England saw their council tax increase by 5%, the highest legally permitted level. Some local authorities, including Birmingham, Bradford, Newham, Somerset, Trafford, and Windsor & Maidenhead, were granted permission to exceed this cap due to specific financial challenges.
At the same time, water bills increased by an average of £123 per year, the largest annual rise since the industry was privatised in 1989. These hikes added to the burden already faced by consumers dealing with high energy prices and general inflation.
According to Ofgem, the energy price cap for households on standard variable tariffs stood at £1,738 at the start of the year. It rose slightly to £1,755 and is set to increase further to £1,758 in January. Although modest, the rise has compounded the hardship felt by households already behind on payments. Energy debt reached an eight-year high in October, with UK homes owing £780 million to their energy providers.
Alongside these changes, broadband and mobile phone bills also climbed. Uswitch reported average annual increases of £21.99 for broadband and £15.90 for mobile services. Nearly every major provider has introduced new price structures for incoming customers, with monthly broadband bills now rising by as much as £4 in some cases.
Millions in Negative Budgets as Debt and Hardship Rise
The rising cost of essential services has placed more than four million people in the UK in a “negative budget,” meaning their income no longer covers basic necessities. According to Citizens Advice, this includes items such as energy bills, rent and food, leaving many unable to maintain a stable standard of living.
Dame Clare Moriarty, chief executive of Citizens Advice, said: “People come to us feeling like they’re constantly fighting to stay afloat but, despite their best efforts, are sinking further into the red.”
According to Uswitch, the situation has become so dire that over two million households now say they will not turn on their heating this winter, a 20% rise compared to the previous year. The data suggests that many are forced to make difficult decisions between warmth, food, and rent.
Dame Clare called for increased government intervention, including a rise in the Local Housing Allowance to help renters, and expanded support for utility bills, particularly energy and water costs.
The financial situation remains tense as households brace for continued increases into the new year. While switching broadband providers or renegotiating contracts may offer some relief, potentially saving an average of £203 annually, many remain stuck in expensive, outdated deals.
